Do I Need a Business License?

If you’ve just started a new business, you’re probably aware that you’ll need one or more business licenses. But what you may not be aware of is that the term “business license” doesn’t refer to a specific, unique document; there may be any number of licenses or permits that your company needs in order to remain in compliant. Here, we’ll go over the process for determining your business license requirements, the types of licences and permits out there, and the most effective ways for you to keep your business in compliance.

How business license requirements are determined

Your business license and permit requirements depend on a few things:

  • Your entity type (whether you’re a corporation, LLC, sole proprietorship, or other type of entity)
  • The purpose of your business (there are industry-specific permits and licenses)
  • The specific requirements of your city, county, and state

In some cases, if you are engaged in any federally regulated activities, you might also need a permit or license from the federal level.

Types of business licenses and permits

There are an astonishing amount of business licenses and permits out there, for nearly every type of business available. The following list, while nowhere near comprehensive, contains a sampling of some of the business licenses available:

  • Alcohol and tobacco permit
  • Bakery license
  • Body piercing license
  • Childcare license
  • Collections agency license
  • Cosmetology license
  • Engineering license
  • Environmental permit
  • Food/beverage license
  • Pest control license
  • Real estate license
  • Restaurant license
  • Sidewalk cafe permit
  • Taxi service permit
  • Waste transportation license

Note that each state differs in terminology, as well as requirements, so it’s important to take your time with your research.

How to obtain your necessary licenses and permits

There are a few different ways to go about determining your license and permit requirements.

1. Contact your state and local governments for their requirements.

Your state’s Department of Consumer Affairs, Department of State, or Department of Licensing may have the information you need; if you’re not sure what department of your state deals with business licenses, try the Corporations Division for guidance. At the county level, try contacting your County Clerk or your County Treasurer / Tax Collector’s office. At the city level, try your City or Town Hall.

2. Hire a corporate attorney.

If you don’t wish to do all of the legwork yourself, you can have a corporate attorney determine what your type of business might need as far as licenses and permits.

3. Hire a third-party filing service.

A third-party filing service will be cheaper than a corporate attorney or legal adviser, since you’re not paying for legal advice; many third parties have an electronic database of business licenses and permits, and they can easily run your company through their system and let you know what you’re required to file in order to stay in compliance. Typically, you will receive a list of the required forms; many third-party services even provide you with the forms themselves.